Correlation Between Global Blue and Sterling Check
Can any of the company-specific risk be diversified away by investing in both Global Blue and Sterling Check at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Global Blue and Sterling Check into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Blue Group and Sterling Check Corp, you can compare the effects of market volatilities on Global Blue and Sterling Check and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Global Blue with a short position of Sterling Check. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Blue and Sterling Check.
Diversification Opportunities for Global Blue and Sterling Check
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Sterling is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Global Blue Group and Sterling Check Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Check Corp and Global Blue is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Global Blue Group are associated (or correlated) with Sterling Check. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Check Corp has no effect on the direction of Global Blue i.e., Global Blue and Sterling Check go up and down completely randomly.
Pair Corralation between Global Blue and Sterling Check
Allowing for the 90-day total investment horizon Global Blue Group is expected to generate 32.16 times more return on investment than Sterling Check. However, Global Blue is 32.16 times more volatile than Sterling Check Corp. It trades about 0.01 of its potential returns per unit of risk. Sterling Check Corp is currently generating about -0.66 per unit of risk. If you would invest 563.00 in Global Blue Group on August 28, 2024 and sell it today you would lose (1.00) from holding Global Blue Group or give up 0.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 19.05% |
| Values | Daily Returns |
Global Blue Group vs. Sterling Check Corp
Performance |
| Timeline |
| Global Blue Group |
| Sterling Check Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Global Blue and Sterling Check Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Blue and Sterling Check
The main advantage of trading using opposite Global Blue and Sterling Check positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Blue position performs unexpectedly, Sterling Check can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sterling Check will offset losses from the drop in Sterling Check's long position.| Global Blue vs. Evertec | Global Blue vs. Consensus Cloud Solutions | Global Blue vs. CSG Systems International | Global Blue vs. EverCommerce |
| Sterling Check vs. EverCommerce | Sterling Check vs. Evertec | Sterling Check vs. Consensus Cloud Solutions | Sterling Check vs. CSG Systems International |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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